Save time with our cheat sheets, fact sheets, checklists & books!

February 16, 2009

Pro rata allocation

Your Guide



Allocation method where allocations are made to participants as a percentage of compensation, with each participant receiving the same percentage or being charged the same percentage. For instance,  if each employee receives 15% of eligible compensation as a contribution to the plan, contributions have been allocated on a pro-rata  basis.

Referring Cite

Plan document

Additional Helpful Information

    • Under Revenue Ruling 2004-10, a defined contribution plan under which the accounts of former employees are charged a pro rata share of the plan’s reasonable administrative expenses, but the accounts of current employees are not charged those expenses, fail to satisfy the requirements of § 411(a)(11) of the Internal

Keep Learning

Domestic abuse distribution

A domestic abuse distribution is one that is made to domestic abuse victim, during the 1-year period beginning on any date on which the individual

Eligible retirement plan

The term “eligible retirement plan”, means a retirement plan to which a rollover contribution can be made. These are: (i)an individual retirement account described in

Qualified See-Through Trust beneficiary

Definition A qualified trust beneficiary is a trust that satisfies the requirements so as to be treated as a designated beneficiary.   For retirement accounts inherited

Saver’s Credit

Definition Also known as the Saver’s Tax Credit: Nonrefundable tax credit available to eligible individuals who make contributions to their retirement account. The saver’s credit

Be among the first to know when

IRA Rules